(d) Requirements for Large Volume Manufacturers in Model Years 2012 through 2017.

(1) 2012 through 2014 Requirements. A manufacturer must meet the total ZEV obligation with ZEVs or ZEV credits generated by such vehicles, excluding NEVs and Type 0 ZEVs, equal to at least 0.79% of its annual sales, using either production volume determination method described in section C.2.1(b) No more than 50% of the total obligation may be met with PZEVs, No more than 75% of the total obligation may be met with AT PZEVs. No more than 93.4% may be met with Enhanced AT PZEVs, Type 0 ZEVs, and NEVs, other than limits described in section C.7.6. The entire requirement may be met solely with ZEVs.

(2) 2015 through 2017 Requirements. A manufacturer must meet its ZEV obligation with ZEVs or ZEV credits generated by such vehicles, excluding NEVs and Type 0 ZEVs, equal to at least 3% of its annual sales, using either production volume determination method described in section C.2.1(b). No more than 42.8% of the total obligation may be met with PZEVs, No more than 57.1% of the total obligation may be met with AT PZEVs. No more than 78.5% may be met with Enhanced AT PZEVs, Type 0 ZEVs, and NEVs, other than limits described in section C.7.6. The entire requirement may be met solely with ZEVs.

Your subject of this thread in the "Other Electric Cars & Plug-In Hybrids" forum specifically states ZEV but various text included talks about PZEV. Can we list all the eligible vehicles in a table with perhaps a column for ZEV|PZEV and a MMYY|QTRYY?

about.com page wrote:PZEVs come by way of California's Zero Emission Vehicle (ZEV) mandate, a vital portion of the state's low emission vehicle program dating back to 1990. Throughout history, CA has set a tight green benchmark for stringent emissions laws that have in turn led to tighter federal regulations. Vehicles are required to meet tight emission test requirements for volatile organic compounds (VOC), oxides of nitrogen (NOx), and carbon monoxide (CO). While it was thought that battery electric vehicles would be numerous on roads by now, problems from cost to range--and even marketing issues--led to a modification of the ZEV mandate that gave birth to the PZEV, the partial zero emissions vehicle which allows automakers to meet their quotas through partial zero credits.

scottf200 wrote:Your subject of this thread in the "Other Electric Cars & Plug-In Hybrids" forum specifically states ZEV but various text included talks about PZEV. Can we list all the eligible vehicles in a table with perhaps a column for ZEV|PZEV and a MMYY|QTRYY?

That quote from about.com is dated.

The basic idea behind this thread is - the new requirement has a minimum ZEV sales figure, that wasn't there earlier. Till '12, manufacturers can fulfil ZEV quota using PZEV sales. This is no longer the case from '12. That minimum floor is 0.79% (3% after '13).

The minimum ZEV sales @ 0.79% need to be about 1,600 for Toyota, 1,200 for Ford, Honda & GM, 800 for Nissan. About 500 for Chrysler & Hyundai.

ps : Each BEV with 100 miles of UDDS range counts as 3 - and with >75miles range as 2.5. So, for eg., Honda would need only 500 or so Fit EVs to be sold. Fuel cell vehicles have even bigger multipliers, depending on range, upto 7 for >300 mile range. This is because of fast refuel requirements to get bigger credits.

If you ever wondered why evs are sold only in CA and not other zev states, you will get the answer.

Also, there are travel provisions that allow California credits to count towards the requirement for other Section 177 states, and vice versa, but there is a discount depending on the state. Fundamentally, this reduces the overall requirement because a sale in one state partially fulfills the requirements in the others, which is why you see some compliance cars being marketed only in California. If they sell enough in California they can satisfy the requirements for all Section 177 states. The travel provisions were to have expired in 2017, which would have dramatically increased the ZEV requirement, but all of that has now been superceeded by the new joint CARB-EPA-NHTSA rule for 2017-2025.

evnow wrote:The basic idea behind this thread is - the new requirement has a minimum ZEV sales figure, that wasn't there earlier. Till '12, manufacturers can fulfil ZEV quota using PZEV sales. This is no longer the case from '12. That minimum floor is 0.79% (3% after '13).

If you ever wondered why evs are sold only in CA and not other zev states, you will get the answer...

Interesting summary of the byzantine regulations.

But I think the poster's assumption of the contribution of ZEV credit sales to Tesla's future profits may be flawed, primarily due to what is probably an under-estimate of future competing BEV sales.

Looks like Nissan alone may have generated ~the same amount of credits in the first six months, as the writer assumed for the entire 2013 MY, and the LEAF is at a current monthly sales rate ~ three times that assumed.

What will Nissan's BEV sales levels (LEAF and any other models) have to be in this and future years, for it to enter the surplus credit market in a big way, destroying the authors thesis of a Tesla's ZEV credit near-monopoly, in a market with a shortage of sellers, and very high prices?

...Tesla will be one of the few manufacturers to have a large surplus of any kinds of credits through 2016, after which the bigger changes start to kick in. Tesla might end up being the only major seller of credits in these markets over the next decade. Even Nissan will likely have to horde its credits...

Keep in mind that the base requirement is something like 26,000 credits for 2012-2013, and Tesla only supplied ~4,800 in 2012. Only Leaf had substantial sales in California which help satisfy this requirement, with just 2 credits generated per Leaf sold, and a need to potentially bank credits for 2015+ when the base requirement goes up to 3%. Also, 2012 was a terrible year for Leaf sales with fewer than 8,000 sold in the U.S. Assigning 50% of U.S. sales to ZEV states is a generous estimate and would result in 8,000 ZEV credits for Nissan, with virtually none for anyone else...

To wrap this up, the important takeaway is that regulatory credits are a lucrative part of Tesla's income stream, and I see little evidence of that changing any time soon. ZEV credits are incredibly lucrative, and will be for a few years...

edatoakrun wrote:...But I think the poster's assumption of the contribution of ZEV credit sales to Tesla's future profits may be flawed, primarily due to what is probably an under-estimate of future competing BEV sales...

What will Nissan's BEV sales levels (LEAF and any other models) have to be in this and future years, for it to enter the surplus credit market in a big way, destroying the authors thesis of a Tesla's ZEV credit near-monopoly, in a market with a shortage of sellers, and very high prices?...

Competition will have two effects. It will lower the demand from other manufacturers and two, if anyone else provides a surplus of ZEV credits it will increase supply.I believe both of these reasons are why Tesla is planning on no ZEV credits in 4th quarter and why they are planning on this to have a smaller effect in the future.

It is not unreasonable to speculate though..It looks like the Leaf falls into Tier 1.5 providing 2.5 credits while the Model S (both sizes) fits in tier IV (as long as the battery swapping qualifies them for that Tier) which generates 5 credits through 2018.

So per unit, Tesla is generating more credits, possibly twice as many next year.

I prefer taking Tesla's approach though and not planning on that income. Rather, mention it as a possibility and if it is there, great.